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Penny Fractions: A Musician and Their Patreon

Hi, hi, hi! I hope everyone reading this is having a nice week! I’m drowning in books at the moment,
Penny Fractions
Penny Fractions: A Musician and Their Patreon
By David Turner • Issue #117 • View online
Hi, hi, hi! I hope everyone reading this is having a nice week! I’m drowning in books at the moment, but if you know of any good music business or technology books coming out in 2020 send recommendations my way. Personally, Wedny Liu’s Abolish Silicon Valley and Jean Burgess and Nancy Baym’s Twitter: A Biography are on my radar. Before I forget, I’ll be off next week, so the next edition of Penny Fractions will arrive on February 5th. The first two newsletters of February are gonna be worth the wait, trust me! Anyway, let’s talk about Pomplamoose and venture capital bubbles.

Over the last few years of doing this newsletter I’ve been a fairly vocal fan—at least in theory—of Patreon/Twitch. Certainly, I hold deep reservations about Amazon but I find the model presented by Patreon intriguing (I mean, I do use it for a reason). So, I wanted to reapproach the conversation about how the patronage model could work for musicians in 2020. Before I get really deep into those thoughts I wanted to talk a bit about Patreon, because the company’s history illustrates the precarity faced by musicians forced to bounce between digital platforms.
Patreon Dreams and Financial Nightmares
Patreon was supposed to be a musician-first tool. Launched in May 2013 by Jack Conte, one half of the YouTube-famous duo Pomplamoose, his narrative for the company is that it was built as an answer to YouTube’s inconsistent and poor payment system. Instead of being forced to rely on the meager payouts based on YouTube advertising and be at the whims of an ever-changing algorithm, artists could instead connect directly with their fans and receive support for their work. In interviews, Conte frequently points out that the patronage model predates recorded music, which is true, however the reason I wrote about the American Federation of Musicians last year was to argue towards more collective, rather than individualistic, ways of supporting artists. While the direct relation between an artist and their community can be good, it can also lead to further isolation and exploitation when the platform’s interests diverge from those of its core users.
Patreon, though a not very complicated idea, started to run into a problem familiar to many musicians: money. In 2013, Patreon raised $2.1 million from a cluster of companies including Charles River Ventures, Freestyle Capital, and SV Angel. Less than 9 months later in June 2014, the company raised another $15 million led by Index Venture, and in 2016 followed up with Series B funding to the tune of $30 million headed by Thrive Capital. The company is allegedly valued at nearly $1 billion despite CNBC’s lovely 2019 headline: “Patreon CEO Says the Company’s Generous Business Model is Not Sustainable as It Sees Rapid Growth”. Reworded for a bit of accuracy: “Patreon CEO Says the Company’s Ability to Rent-seek Must Increase to Beat Back the Heated Breath of Venture Capital Vultures”. The company boasts it’s paid out over a billion dollars to creators since 2013, which would mean it’s brought in roughly $20 million, but reportedly it must pull in more money!
I point towards this contradiction because Patreon’s business model is one that requires creators and patrons to be on the same page, otherwise tension can arise. The company attempted to place the payment processing fee on creators back in 2017 and was met with such intense backlash that within a week the company walked back the policy. Last year the company introduced three new tiers, while grandfathering in older users. This allowed the company to increase its ability to rent-seek from a flat 5% to a peak 12% fee for a number of features that were previously free. If there was ever to be Patreon creator solidarity, the company not so silently placed a wedge between early creators and those just finding the platform with this decision.
By contrast, Bandcamp, though not paying out as much money as Patreon, hasn’t actively sought for ways to nickel-and-dime creators through effectively instituting an anti-labor, two-tier system for creators like Patreon did last year. These criticisms of Patreon are not to dismiss the company but rather to contextualize the risks of putting too much weight on what’s become an increasingly unstable platform. Despite the struggle of working with a VC-backed firm, the patronage model offer an interesting alternative to the traditional music industry path.
A New Model
Last year Liz Ryerson, a musician, writer, and podcast host (with her own Patreon here!) pointed toward a Twitter thread by Jaime Brooks that attempted to describe the relationship between musicians, Patreon, and record labels. The entire thread is certainly worth a read but I wanted to highlight these two particular tweets
i believe the patronage model, whether via patreon, via snapchat premium, via onlyfans, via direct donations on cashapp etc. presents an opportunity to create a new independent music industry that isn’t constrained by the conservatism of the existing one 
my prediction is that more and more of the most impactful and culturally resonant artists working in indie music are going to be people who are coming from game dev or sex work or political organizing, who are already comfortable with patronage models and radical politics 
No matter how many times commentators or journalists write about how Spotify “disrupted” the music industry, the fact is that not a lot has really changed in the last twenty years since Napster. The rise of platform capitalism within music I argued last year can be dated to the late 90s, even before Napster, so in a way we’re already into the third decade of this “new” system. That’s why we’re seeing increased financialization at the top level of the industry, with the few remaining labels and streaming companies doing stock swaps and buying into each other. If Sony Music’s original goal in 1997 was a digital jukebox that would be the primary means of accessing music, many are already living in that world. This presents a real challenge for “independent” artists who understand the streaming system is rigged against them and so are attempting to find new ways to make this work. 
What’s offered by Patreon, or even Ampled, a new cooperatively-owned music subscription platform, is a way to be an artist truly outside of that older system. The musician Zola Jesus spoke about this a bit in an interview with Patreon; she talks about the freedom that comes with being removed from the normal rhythms of the music industry and the ability to build and create one’s personal fanbase. Oddly enough, despite the company’s origins, the community that took up the model wasn’t musicians—far from it. Rather, the highest earning creators are independent podcasters and YouTubers, who essentially only use the platform to collect payment, deliver content via a private RSS feed, or build up community via a Discord server. In fact, little about Patreon is necessary for most creators, except for the fact that it’s become the default platform thousands of creators. 
The lack of commitment to Patreon—it’s own fragile business model notwithstanding—shows that for musicians there’s still a rather open playing field in terms of what could be done through a patronage model. The current system of music streaming is a catch-all that wasn’t created with the interests of musicians in mind. Rather, it was just a way to further abstract music from the original creators and put the power in the hands of copyright holders. The patronage model, whether via a Patreon, Ampled, Mixcloud for DJs, or even Bandcamp, can open new doors to new possibilities. This is why I often cite Playing to the Crowd by Nancy Baym; her book talks about how many of these experiments played out when they weren’t mediated by VC-backed companies. The result was not only the formation of unique communities, but also ways of creating relationships between creators and fans that might’ve not been possible under purely capitalist circumstances. That’s what I personally would like to see happen in this space: more sustainable platforms for artists as well as opportunities to create on self-determined terms. That feels like it could lead to small but perhaps meaningful change.
Unheard Labor
A quick follow-up from last week is that Rolling Stone reported that layoffs at iHeartMedia could eclipse 1,000. Good luck to all the workers going through this tough time and solidarity to workers at Des Moines, Iowa’s KXNO station, who were able to fight and keep their jobs. On a brighter note, there appears to be a bit of good news for the Baltimore Symphony Orchestra in terms of fundraising, after an extended lockout last year. The last bit of news this week is that artists part of the No Music for ICE campaign said they’d be picketing outside of Amazon-sponsored events at SXSW. I won’t be at SXSW but solidarity with anyone participating in those actions and would love to do any signal boost if I can offer anything.
6 Links 2 Read
Anne Steele and Benjamin Mullin got a fun late Friday scoop last week with rumors of Spotify looking to buy The Ringer, the media site started by former Grantland founder Bill Simmons. My initial reaction is that I find this a bit boring. Broadly speaking, not a big fan of media consolidation, even more so considering The Ringer is reportedly a profitable company. These rumors, however, are in line with Spotify’s 2019 purchases of Gimlet and Parcast, two companies well known for producing original podcasts. One theory is that Spotify’s play with podcasts is simply to buy out big names, including the Obamas, as a way to push users away from music and keep down those margins. Additionally, the company can keep expanding its pool of content for potential advertisers. None of this is particularly interesting to me and we’ll see in a couple weeks how the company did in Q4 2019, but considering the company’s slow growth of premium users within non-western markets, advertising is likely to be a bigger play in the future. Not to be glib, but if you’re a musician or work in music, I can’t find any reason to not look with horror upon anymore media consolidation (unless you have a C-Suite title). At the very least, hopefully the Ringer Union gets a nice union contract, as Bill Simmons certainly doesn’t need another dime of tech money. (Unrelated: I’m not sure when the Wall Street Journal started putting exclusive in their pieces like a fucking grocery store tabloid but I love it.)
Last year I wrote about Amazon offering the most options on their music streaming platform, which is the crux of this article, so I suggest you read both. No reason not give Tim that click! 
I said it a year ago but it was Spotify’s arrogance that was to the detriment of songwriters. That’s not to say Warner/Chappell held their best interests either, but it was a rather brazen move by Spotify. Still, this got resolved…finally. 
Chris Molphany wrote about Roddy Ricch’s “The Box” and it’s sudden, TikTok-powered rise, and while I wouldn’t quite call “The Box” another “Old Town Road”, I do understand that hype around TikTok continues to be rather frenzied. 
The official stance of Penny Fractions is that American antitrust has been asleep at the wheel for decades and under no healthy society would firms like Amazon and Google amass so much power. I don’t think Sonos CEO Patrick Spence would take quite as harsh a stance but we’ll take our allies where we can find them. 
Conceptually, I do find this an interesting way of understanding how to use the space of a festival in a more considered manner. Yet, I still gotta mention the fact that Anschutz Entertainment Group (AEG), one of the biggest American live music companies, was built entirely on oil money. Forgive me for thinking we always gotta be thinking a bit bigger with how we attack this problem.
Blog Roll
The Penny Fractions newsletter arrives every Wednesday morning (EST). If you’d like to support it, check out the Patreon page or follow it on Twitter. The artwork is done by graphic designer Kurt Woerpel whose work can at his website here. The newsletter is copy edited by Mariana Carvalho, with additional support from Taylor Curry. My personal website is davidturner.work. A list of my favorite 2020 albums, books, and mixes can be found here. My current job is Curation Analyst at SoundCloud, so all thoughts here represent me, not my employer. Any comments or concerns can be sent to pennyfractions@gmail.com.

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